Resolving high credit utilization with opening a new credit card - Implications and Remedies

[YellowJacket]

Hi all!  27 year old newbie here trying to better my credit score to get the best rates for a mortgage (so excited and terrified!)

I have a $9,600 credit card balance with a limit of $13,000.  I opened up a new credit card with a limit of $3,000 that offers $0 balance transfer and 0% apr for 15 months.  My intent was to transfer $3000 into the new card so that I can reduce the accumulated interest on the old card while paying $200 on both cards every month.

Currently I have good credit with a score of 734 (experian),  729 (transunion), and 730 (equifax). All of them list "High balance to credit limits too high on revolving accounts" as #1 in the factors affecting my credit score, so naturally I'm worried about doing anything that would further aggravate this.

Will utilizing all the available credit on the new card hurt my credit and thereby reduce my chances of getting the best interest rate on a mortgage (I'm thinking USDA or FHA)?

My thoughts are that my overall credit utilization will be lower with the addition of a new credit line, but the individual utilization on the new card will be 100%.  I know the overall utilization affects your credit score, but does each individual account utilization matter as well?

Scenario 1: Do nothing
Card 1 utilization: 73.8%
Card 2 utilization: 0%
Average utilization on revolving credits: 36.9% (average of utilizations is this even used?)
Overall utilization on revolving credits: 60% (sum of balances / sum of credit limits)

Scenario 2: Do balance transfer
Card 1 utilization: 50.8%
Card 2 utilization: 100%
Average utilization on revolving credits: 75.4%
Overall utilization on revolving credits: 60%

[YellowJacket]

another tidbit of information:  I'm looking into buying a shortsale which could take anywhere from 1 month to infinity to close.

[guiness56]

Yes, each individual CC and overall utilization. 

No matter which way you choose, your utilization is still too high.  Start by trying to get it down to at least 35%.  It's still high but better than 60%

Optimally, you should let half your CC report at 0 and the others report at 9% or below.  YMMV so you may need to work with it and see what works best for you.  For instance having all but one report 0 and the remaining report at 9% or below.  FICO does not like to see all CC report at 0. 

Maxing out a card or being near maxed out is definitely not a good thing at all.

FICO has no memory so if you are scored at 60% utilization today and next month paid down a card and your utilization is at 35% that is what you will be scored on.  You are scored for what is on your current report.

When your utilization goes down your score will go up.